This week, the National Assembly made public bill number 125 which "establishes rules for incentives to tourism in Panama", after a year of talks between the private sector and government.

On becoming law, new hotels in the capital district who have invested at least $20 million will be exempt for 20 years from import duties on materials, furniture and equipment. To qualify for the exemption, new premises will have to register within three months of the law’s enactment.

The domestic private sector had asked for tax benefits not to be reactivated after the expiration of the last period stipulated by tourism law number 8 of August 1994, which was valid until December 31st, 2008, a request which has been ignored in the proposed law, reports Prensa.com. This led to investments reaching close to $2 billion between 2006 and 2008, when investors bet heavily on the development of tourism.

"Regarding the idea of reviving benefits for construction in the capital city (if only for a short period), some hoteliers are talking about a possible saturation. With the opening in the coming months at least 15 hotels, representing about 5,000 new rooms, worried hoteliers believe that by promoting incentives they will encourage more construction which at the moment is not needed," reported Prensa.com.

Source: Prensa.com

More on this topic

Incentives for Local Tourism in Panama

August 2017

Almost five years after the Tourism Benefits Act was approved outside of the District of Panama, it has been announced that the regulation will be ready in the coming weeks.

The regulation of Law 80 of 2012 was prepared by the Tourism Authority of Panama (ATP) and has been sent to the Ministry of Commerce and Industries for approval.

Honduras: Incentives for Investment in Tourism

July 2017

Between August and September a new law could be approved that would grant exemptions and other incentives to investments in hotel infrastructure and other tourist activities.

The tourism incentives bill was presented by President Hernández to the National Congress, which expects to complete the approval process no later than September. If approved, the new law would grant various tax benefits and incentives to investors developing tourism projects. 

A New Industrial Law for Panama

March 2017

A new bill, agreed between the government and the private sector, expands tax incentives granted to companies in the sector through the Certificate of Industrial Promotion.

The text was drafted after the government and the private sector reached consensus on how to define tax incentives to which companies in the sector are entitled to. The project will be submitted to the Cabinet this month and will be discussed in the current legislative period.

New Tourism Law in Panama

November 2012

The Panamanian National Assembly has given final approval to Act 481 which includes incentives for the promotion of tourism.

Tourism businesses welcomed the new rule, but complained that no provision has been made in establishing incentives for small tourism businesses.

An article by Alex E. V. Hernandez in Prensa.com review some of the main provisions of Act 481: